Never gonna give you up: ACCC takes TPG to High Court

news The Australian Competition and Consumer Commission this morning flagged plans to appeal a bruising legal loss against TPG, with the regulator continuing to push its case that TPG’s ‘unlimited’ ADSL and telephone bundle advertisements were misleading.

When the case was kicked off, TPG made the following statement: “TPG is disappointed with the ACCC’s decision to bring proceedings against it in relation to our award winning $29.99 Unlimited broadband plan which is available when bundled with line rental at $30 per month. This plan continues TPG’s value leading services and has been very well supported by customers across the country. TPG believes that our advertising clearly and properly represents the costs involved and we will be defending the proceedings.”

However, late last year, the full Federal Court allowed TPG’s appeal in the case, ruling that Justice Murphy erred in applying the legal test of whether the advertisements misrepresented the offer and also erred by not giving appropriate consideration of consumers’ knowledge relating to bundling practices and set up charges.

The court did uphold Murphy’s decision relating to TPG’s first initial TV advertisments of the plan, and did uphold some findings regarding website and newspaper advertisements. That section of the Trade Practices Act relates to the way pricing is advertised. However, in the full judgement in late December, available online here, the Federal Court made it clear that revised TPG television, and initial and revised radio, print, public transport and online advertisements published by TPG of the $29.99 plans were not misleading.

This morning, the ACCC issued a brief statement noting that despite its almost comprehensive loss in the Federal Court late last year, it planned to continue attempting to hold TPG to account in the case. “The ACCC is seeking special leave to appeal to the High Court in relation to the Full Court’s findings on both liability and penalty,” the regulator said. TPG has not issued a statement in response.

opinion/analysis
Frankly, I consider this to be a poor move on the ACCC’s part. I’ve consistently stated, and I think most people agree with me at this point, that the ACCC is pushing way too hard with this one — in fact, the regulator is basically attempting to push a weak case uphill.

If you read the various judgments which have been handed down so far in this case, you will speedily come to the conclusion that it is the most recent judgment handed down by the full Federal Court in late 2012 that is the far more nuanced and comprehensive one. As in many Federal Court actions, the single judge who initially examined this case didn’t go into as much detail and nuance as would be ideal. The more recent judgement correctly rectified this situation, in my opinion, and clearly identified where TPG had stepped slightly over the bounds of propriety with its advertisements and where it had not. It made a great deal of sense to me.

The result was that the ACCC got its nose bloodied last year. Now, with its decision to appeal the case to the High Court, the ACCC is likely to make its own situation even worse. I believe it extremely unlikely that the High Court would overturn the very sensible judgement of the full Federal Court.

I am sure there are those out there who will violently disagree with what I am saying here: People who are inherently suspicious of Big Corporations and want to see the Government holding them to account. Hell, I’m normally one of those people! However, in all of these cases (with the possible exception of HP), the ACCC appears to have targeted technology-related organisations with an extremely heavy fist, when it’s highly debatable whether those organisations actually did anything that wrong in the first place. Sure, they stepped over the line slightly … but have these cases been worth taking to court? Isn’t there a better option?

And when there have been clear examples of anti-competitive behaviour, such as the $800 million payday Optus is receiving from NBN Co, the ACCC has been hesitant to act; an approach we’re seeing play out again in Telstra’s anti-competitive acquisition of Adam Internet, where the ACCC is taking a softly, softly, cautious approach, despite clear industry ire on the issue from Telstra’s competitors and the lack of any obvious outcome for consumers from the acquisition.

Maybe it’s just me. But I’d like to see a smarter approach from the ACCC when it comes to dealing with the technology sector. Its recent legal actions just seem a little bit … off, to me. It feels like maybe the regulator doesn’t quite understand all the issues.

25 Comments

The ACCC has a very “iffy” behavioural pattern when it comes to upholding competition.

They’re often so slow to react, that by the time they do, any actual valid concern has long since expired; a needed bureaucracy, don’t get me wrong, in the “keeping the b*stards honest” sense, but the ambulance at the bottom of the cliff approach was always going to be a problem.

You’re right Brendan, they can be at odds sometimes with their decisions; as in they dont seem to have consistency.

What troubles me about the ACCC is that they sometimes pick a fight with smaller companies like TPG (theoretical example) , that company then is punished for doing something wrong (monetarily or otherwise) but a bigger company like Apple – gets off relatively lightly with a Million dollar fine.

I think the 4G case was a good example of ACCC doing reasonable work; indeed they did do the wrong thing. You cant advertise something as ‘4G’ when it :
A: Clearly wasnt capable of it (at the time of release – even though it had the capability in other countries)

– and –

B: Clearly confused customers that it WAS 4G purely because the definition of ‘4G’ was for the most part – undefined in Australia compared to international laws. 4G here means … 4G – which is reasonably definied to a layperson as LTE, not Dual Cell / Dual Carrier HSPA like it is in the USA.

What I’d like to see the ACCC doing is investigating things like Telstra Regional Coverage – which in my technical opinion *takes Vodafone hat off* should be subject to site-free fees for setup of equipment ( and then possibly managed by say – NBNCo. Telstra charge like a wounded bull for their site space – which is for the most part Government subsidised in regional areas and national parks preventing Optus and Vodafone from getting in there and providing ‘a’ service rather than the alternative ‘none’.

Chasing ghosts like this TPG case is just a waste of time. I know they need to show they’re doing something with taxpayer dollars during the year, but I’m sure they can be far more effective otherwise.

Then theres the off-topic point that having an ACCC, an AMTA and an RFNSA is pointless and they really all should be one large government organisation, not 3 – as so we dont have this government pointless buck-passing between these legal events.

Under the rules in operation today ALL carriers must make their infrastructure available to the others.
Other carriers wishing to share must pay their share of the costs however, they don’t get to hold back and then squat for free on the pioneering carriers outlay.

If your carrier of choice does not offer a service in your area it is because they are not interested in doing so, not because someone else is excluding them from access.

Is that really true? I live in Bellamack, NT, and here, we have a choice of just one provider, Telstra. I would like to use another – and other providers have told me that they like to have me as a customer – but (at least at the time I was connected last April) Telstra will not permit it. My information (from Telstra and other suppliers) is that I am stuck with Telstra until the NBN arrives here some time next year.

Going to smash this notion since its totally false.
Anyone that has been on the inside or directly dealt with Telstra regarding their infrastructure access programs knows they are about as shady as a $5 iPhone offered to you from under a brown trench coat.

Telstra make the process about as hard as they legally can. Its in their best financial interest to do this. The lead times on getting space to install ADSL equipment were rediculous… and they frequently use the excuse “there is no available space” and are not required to prove this detail in any way.

And when it comes to mobile networks… yeah the gloves are off, I dont believe the legislation regarding access to the exchanges/sites counts for mobile sites at all and I expect they instantly refuse anyone access to their mobile network infrastructure sites wherever possible.

I’m not sure they have any real direction, as in an overriding mission statement, or corporate vision if you will.

They need to sit down and have a think about what it is they are trying to achieve and then work towards that, rather than the current knee-jerk, “make them stick to the act” way they are doing things at the moment.

I’m not really sure why they keep going TPG after TPG made the changes it did, surely those changes were what the ACCC was after in the first place?

The problem with the ACCC is that they are heavily invested in a weak case like this which hasn’t actually had very many complaints at all whilst there are some other really serious issues in the IT world that need to be addressed and aren’t. Things like telcos charging exhorbitant excess usage fees far beyond their purchase price.

The whole TPG case was based on advertising not including the phone line rental component of which is a mere $30/month and advised on your signup call or signup page. Yet, Optus advertised through the TV and received my custom and yet nothing in the advertising or phone call specified the huge excess data amounts. My $70/month plan has been costing me almost $400 average per month as a result yet I wasn’t advised during the advertising etc. This isn’t trying to get out of the costs, it’s shining light on the fact that if you are going to chase a company for advertising not showing hidden charges you have FAR more companies doing this with far more expensive losses to Australians.

Things like Australian SEO companies tricking clients into resubscribing, refusing their ability to cancel, bulling and doctoring advertising media (buying facebook likes internationally), changing T&C’s on the fly without client notification to amendments. In actual fact the company I am speaking of actually stole their entire T&C from another website and just changed some key words.

ACCC needs to spread it’s resources and focus on the bigger issues or attack more things at once on a smaller scale. Don’t fight battles with large companies when your case isn’t even all that strong. Focus on those other guys who are blatantly scamming the public out of their money.

“way the regular rubber-stamped” should be “way the regulator rubber-stamped”?

I can see that TPG might bear some responsibility for the few adds (mostly radio) that did not explicitly mention the phone charges, but it’s hard to generate outrage for people who might have been duped into purchasing what can arguable be described as Australia’s best value bundle.

Not one person would have actually signed up for that plan without becoming fully informed of all the costs.

IMHO if TPG changed their advertising quickly when the ACCC brought this to their attention (as I believe they did) no more action needed to be taken.

I know it’s just a little crime, but so too is shoplifting, drink driving and manslaughter, aren’t they? You’re suggesting that it’s fine to break the rules or the law as long as you only break it a little bit and that hiding the evidence after you get caught should resolve the issue? TPG purposely advertised their plan in a way that they knew would be misleading, with the mindset that IF they get in trouble THEN they will stop, so at what point do we draw the line on this? If you rob a service station, but give the money back IF you’re caught, is that ok? Who was hurt, if you didn’t shoot anyone and they have their money back, no harm done? I mean there’s robbers out there that kill people, so let this guy off and focus on catching the ones that kill? At what point is it no longer acceptable for someone to knowingly and purposely commit a crime, as long as they do what they can to fix it, or hide the evidence, after the fact? Who decides where the line is drawn? Renai LeMay? One of the other people that left a comment here? Or a government body specifically set up to enforce the rules or laws, such as the ACCC? If one small thing is let slide, the next thing will be a bit bigger and slide a bit further, until we have an avalanche of breaches being let slide and everyone will be blaming the ACCC for that too.

Seriously, if it’s that borderline just stop wasting our taxes and spend them on something useful. It’s difficult to see how an ill-fated, no-expense-spared face saving attempt by a Government department could be considered responsible use of resources.

The ACCC has long used the threat of massive penalties to enforce it’s will.

I think there was no doubt that the initial ads WERE misleading. TPG didn’t even bother to appeal THAT ruling which speaks for itself.
The rest is all about the size of the penalty. The full court does not believe that the “penalty fits the crime” and reduces it. Given the redress TPG (grudgingly) accepted at the time, including releasing those mislead from teh contract, I am inclined to agree with the full court.

Face it, TPG broke the law.
There ad said 29.99 and in small writing mentions the 30 bucks (in small writing) but the voice over tells you no more to pay blah blah.

And they are misleading the public again with the claim that you get free ebay, facebook, twitter etc without any data usage metered, however in the fine print it says if you tether your phone guess what.. yep you get charged for the free stuff.

I bet most of you didn’t know that.

All commercial regardless of company must abide by the fair use of declaring all charges you will be up for.
Optus is dreadful at doing this. Check out lunch time week day ads and you will see what crap they spew out to the mummy’s at home.

Also keep in mind that most readers here will have some knowledge of communications and the way things work.
However most older home users have no idea and get trapped in to this so called little step over the line.
$30 buck is a lot for some of us and is no excuse to let tpg off the hook.
And if you think the ACCC is weak try getting the telecommunications ombudsmen to resolve phone /data issues for you… they a waste of space and money.

I think the ACCC is right to pursue this case, even if only to settle once and for all the key legal issues involved. One such issue, which our estemed Mr LeMay touches upon, is whether this is indeed a weak case – and is so, on which particular grounds.

My reading of his article is that he sees the relative weakness or otherwise of this case as hinging upon a small number of issues, including (1) whether or not TPG’s advertising was deceptive; (2) whether the deception hurt people badly; and (3) how many people were actually hurt.

By general agreement, it seems that Issue #1 has to be answered in the affirmative: TPG’s advertising was deceptive. LeMay, however, seems to think this deception was marginal – as he puts it, “slightly over the bounds of propriety”. His reasons for saying this appear to be related to issues #2 and #3 – his belief that relatively few people were deceived, and few if any people lost out heavily. In short, he seems to be arguing the case that the seriousness of a crime is to be measured by the number of its victims, and the sizes of their losses.

This is, however, a highly debatable proposition, and one that the ACCC might reasonably wish to test in the High Court.

Moreover, there is a further issue to be considered in this case, which Lemay seems to ignore totally, and that is the relative power relationship between the advertiser, TPG, and the intended audience, who presumably include some of the least powerful people in the country. In this particular case, the argument might go, TPG not merely used its advertising muscle to deceive the public, but used its broader communicative powers to try to influence public perceptions as to what is reasonable corporate behaviour in the marketplace – to its own advantage!

In short, the true enormity of TPG’s crime might be seen as not merely that the company conned a few dollars out of the pocket of a few poor citizens, but that they did it in a way that made the citizen feel that they had no grounds for complaint, or maybe even that they, the citizens, were negligent and stupid for not understanding the contract better.

If this is what is in the back of ACCC’s mind, then I say, more power to their sword!

I’m not sure how this case is going to go but the ACCC was right to target Apple for using “4G”. Imagine the farce if they hadn’t… manufacturers could have brought i any LTE phone utilising any obscure band and sell it as “4G”. Many consumers don’t understand these (important) technical details and the ACCC provides clarity.

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